As an entrepreneur you’ve hopefully already thought a lot about protecting your company’s intellectual property. However, many business owners make the mistake of only considering protections against those outside their company who might seek to violate their IP rights.

What about those within your company who are actually creating the intellectual property you want to protect? This is a complex area of IP law that has been around for nearly as long as businesses have been employing workers.

The key legal question at hand is, who actually owns the rights to intellectual property created by employees and independent contractors—the employer or the creator?

Often, if you do not take proper action to protect your company’s rights to the intellectual property created by your employees, then the ownership of the rights to that property will in fact default to the person who created it.

There are numerous contracts used by businesses that are meant to protect the company’s IP, including things like nondisclosure agreements, noncompete agreements, and of course patents, trademarks, and copyrights. However, few are more important to protecting your company’s rights to the work created by your employees than the Invention Assignment Agreement.

This is a contract that should be signed by any and all employees who create things for your company, whether they fall into the realm of inventions that can be patented or creative work that can be copyrighted.

By signing an invention assignment agreement, employees agree that the IP rights to anything they create within the scope of their employment will be owned by the employer. The agreement stipulates that the employer is entitled to these rights because the company is providing the resources needed for the employee to create the intellectual property as well as shouldering any liability involved in the creation of the property. Keep in mind, this only covers intellectual property that is specifically created as a direct result of working for the company. If an employee invented something on his or her own time that had nothing to do with their work for you, they would retain the IP rights.

Business owners should also define similar stipulations in any pending contractor agreements with independent contractors. As with the invention assignment agreement, your contractor agreements, under certain “work-for-hire” circumstances, can assign you the rights to any IP created while the worker is contracted by your company.

In order to avoid complications, it is important that these agreements be signed before the employee or contractor begins working for your company, otherwise you will need to make it retroactive.

Your invention assignment agreements should also conform with state laws. If you are interested in crafting effective invention assignment or contractor agreements in the State of Colorado that will protect your rights to the intellectual property created by your employees, please contact the Doida Law Group today.